Retailer Zalando narrows profit outlook, sees growth at lower end of range
Zalando's Financial Forecast and Market Response
By Linda Pasquini
Profit Outlook and Revenue Guidance
BERLIN, Aug 4 (Reuters) - European retailer Zalando on Tuesday forecast 2026 revenue and growth to land in the lower half of its previously guided range and narrowed its adjusted operating profit outlook, sending its shares down 9% in pre-open trade in Frankfurt.
The online fashion retailer said the revised forecast reflects first-half performance and does not signal a change in expectations for the remainder of the year.
Growth Expectations and Market Sentiment
The Berlin-based company now expects both annual gross merchandise volume (GMV) and revenue growth in the lower half of its previous 12% to 17% range on a reported basis, "in line with market expectations".
"(Zalando) shares had a good run. Cut of GMV outlook will not help today even though market expected a cut," a local trader said.
As of Monday's close, shares have gained nearly 15% so far this year.
Adjusted EBIT and Strategic Initiatives
Zalando now expects adjusted EBIT of €680 million to €720 million ($782 million-829 million), compared with its previous forecast of €660 million to €740 million.
Synergies and Efficiency Measures
It said it has greater confidence in reaching the midpoint of the new range, supported by synergies from the acquisition of About You, expected second-half benefits from its logistics network overhaul, efficiency measures, and strong growth in its higher-margin partner, software, and retail media businesses.
Quarterly Performance Highlights
Second-quarter GMV grew 20.7% year-on-year to 4.9 billion euros on a reported basis, aided by rapidly expanding AI capabilities.
Quarterly adjusted EBIT increased 10% to €205 million, with more than €10 million in synergies from About You.
Future Investments and Market Challenges
Zalando continues to invest in refining its customer offering, expanding AI initiatives, and strengthening its European logistics network as it seeks to drive growth despite weak consumer spending and intense competition from low-cost fast-fashion players such as Shein.
($1 = 0.8690 euros)
(Reporting by Linda Pasquini; Editing by Miranda Murray and Sherry Jacob-Phillips)
